View full sizeInmates process prison laundry as part of job-creating projects of Oregon Corrections Enterprises. Mitch Morrow, deputy director of the Oregon Corrections Department, helped his son with pay issues after he was hired to help supervise laundry operations.Oregon Corrections Enterprises

Mitch Morrow, deputy director of the state Corrections Department,
pressured prison officials more than previously known for financial favors to benefit his son, who also works in the system, according to interviews and documents obtained by The Oregonian.

Morrow's intercession with officials at Oregon Corrections Enterprises resulted in a pay raise, boosted moving expenses and a light duty job to recover from a football injury, the records show.

The moves cost OCE approximately $16,000.

The disclosures are a spillover from a recent criminal investigation into state prison executives dipping into the prison industries enterprise for off-the-books spending. Investigators found no evidence of criminal conduct but did find Morrow used "improper" influence in the hiring of his son, Zachary A. Morrow, 26.

The Corrections Department and OCE are separate state agencies with their own budgets, employees and governing laws. While independent, OCE's administrator is appointed by
the Corrections Department director.

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Transcripts of interviews of key state officials conducted by state investigators during their recent criminal investigation into allegations of inappropriate spending at the Oregon Department of Corrections.

Corrections Department officials said Monday that a second inquiry by the state Justice Department focusing on Morrow's conduct concluded that he had not violated state laws and policies.

Through a spokeswoman, Corrections Department Director Colette Peters refused to release the exonerating report or describe its findings in detail. She said she needed to keep the document secret because it may be an issue in a whistle blower's lawsuit filed last week against the agency.

Rob Killgore, former administrator of OCE, sued the Corrections Department for $1. 5 million, contending his firing last month was retaliation for blowing the whistle on possible illegal spending. Peters said at the time that his firing was unrelated to his allegations.

But the lawsuit complicated yet a third review of Killgore's allegations, including those against Morrow. The Corrections Department inspector general stopped work last week on an internal review until the lawsuit is resolved. The inspector general was following up on concerns identified by Justice Department investigators.

Morrow had said he wouldn't discuss the allegations publicly until the inspector
general's work is done, and agency officials said this week he is standing by that position. His son, who still works in the system, didn't respond to telephone and email messages seeking comment.

As deputy director, Morrow is a powerful figure within the Corrections Department, in charge of day-to-day operations that cost roughly $1.5 million a day. He is a 30-year veteran and was in the running to succeed as director when Max Williams stepped down in late 2011.

Discharged from the Air Force, Zachary Morrow was looking for work in 2009 when his father suggested prison industries officials consider him for a job.

"I say, 'Hey, take a look at him,' " Morrow told state
investigators, according to a transcript. "I didn't direct them to hire
him. I said consider him."

Nick Armenakis, a deputy
administrator at OCE after nearly 30 years with the Corrections
Department, managed the hiring process.

Armenakis said OCE hired
Zachary Morrow as a laundry coordinator without a direct order from
Morrow. He started at the state prison in Madras on June 1, 2009.

"We wanted to go ahead and take care of his boy," Armenakis told The Oregonian.

In
submissions to state investigators, Killgore wrote, "The position
vacancy was not posted and no other candidates were interviewed for the
position."

That fall, Zachary Morrow was offered a transfer to Salem when the Madras laundry was closed.

In
his account to state investigators, Morrow said his son told him he
wasn't going to be paid moving expenses. He said he told OCE officials
"you need to follow your policy" on moving employees, according to the
interview transcript. "I could have moved my son. That wasn't the
issue," Morrow told investigators.

On Nov. 24, 2009, Armenakis
put an offer in writing, including a $3,012 raise, boosting the salary
to $41,688. He also was offered $2,000 for moving expenses.

Mitch
Morrow soon called Armenakis, his sometime golf partner who once was
interim director at the Corrections Department. Morrow wasn't happy,
Armenakis recalled in his interview with The Oregonian.

He said Morrow angrily told him both the raise and the moving allowance for his son were inadequate.

"He's going off on me," Armenakis said. "He's telling me I'm an idiot and that Rob (Killgore) is an idiot."

Armenakis said he had never been so berated in state service. He said he objected to Morrow's demands.

Armenakis told The Oregonian that Morrow repeated his demands a few days later at their usual Saturday golf game.

Armenakis
relented. He added an extra $1,920 to the son's salary and increased
the moving allowance to $5,000 -- double what OCE had paid any employee
to move. He also authorized four days of paid time off to make the move.

He said he proceeded against his judgment because he was working part-time for the state and nearing retirement.

"I was going to be the sacrificial lamb," said Armenakis.

The conversations were so heated that Morrow reported it to Williams, then the Corrections Department director.

"He and Nick had gotten into some words," Williams told state investigators, according to a transcript.

Peters,
who replaced Williams as director, told investigators she knew of the
dust-up as well. "There was kind of a misunderstanding between Mitch and
Nick," she said, according to a transcript.

About a year later, Morrow again pressed OCE officials to take care of his son.

He
wrote in a Sept. 2, 2010, email to Armenakis and Killgore that his son
had been told he was about out of sick leave to recover from an off-duty
football injury. Recovery was expected to take four months.

Morrow
wrote in an email that he wanted OCE to put his son on "light duty"
instead to keep his paycheck. He said the prison system routinely found
ways to keep workers on the job despite circumstances that otherwise
would leave them without pay.

Eight days after the email,
Zachary Morrow was posted to a computer entry job, where he remained for
more than three months at a salary cost of $11,000.

In July
2011, Zachary Morrow quit his laundry job to take work as a corrections
officer at Oregon State Penitentiary. He kept his salary level from the
laundry job, which meant his starting pay at the prison was $7,000 more
than typical, Corrections Department officials said.

Officials
at the state Department of Administrative Services said state policy is
to allow state employees to keep their salary when transferring to
another state job. The pay is limited by the maximum pay scale for the
new job, officials said.